Save Article

Some Indians See Profit In Harvest Woes

A laborer rested on jute bags filled with wheat grain, in Amritsar, May 3.

India’s inability to store record wheat stocks has opened up business opportunities for some innovative entrepreneurs.

The country, home to the highest number of malnourished people in the world, doesn’t have enough warehouse space to store this year’s bumper wheat harvest, meaning much of it will rot. A shortage of jute sacking to pack the wheat crop has exacerbated the problem.

For Anil Kanda, director of Silo Bags India Private Ltd., the nation’s problems are a business opportunity. Mr. Kanda, a 40-year-old former textile trader from Rajasthan, decided one way to beat the jute bag shortage was to bring in machines from Australia and Argentina that can pack wheat into massive 60-meter long polyethylene bags. The machines can store up to 70 metric tons per hour in the sacks, securing them through the coming monsoons.

Of course, the technology won’t solve India’s problems as it’s too expensive to be scaled up across the country. But it’s brought some relief to government procurement centers in Madhya Pradesh, where a shortage of jute bags this year has caused planning problems for the state’s food officials. (read related story)

“They approached us when they faced a jute bag problem,” Mr Kanda said. “We were wandering here and there until that time for about a year-and-a-half, looking for a buyer.”

It not only helped the government through a critical period of 15 days without jute bags, but now the state is considering wider use of the technology, according to Madhya Pradesh’s Food Minister Paras Jain.

Two years ago, Mr. Kanda was thinking of setting up private grain warehouses, but discarded the idea as soon as he sensed that silo bags offered a more immediate solution. Warehouses can take months to set up, with investors needing to acquire land and government permissions. The silo bags can immediately pack grain and make it secure for more than 24 months.

“I was sitting in China with a partner and thinking about the warehouse, when my partner said…why don’t you instead start with silo bags?” Mr Kanda said. He wrote a mail to a contact in Australia. Things fell into place and by March 2011, he had launched his company.

“We approached nine state governments, created also a model for everyone to see in Rajasthan state’s Ganganagar district. Everybody liked what they saw, but there were no orders,” Mr Kanda said.

Then, Madhya Pradesh came on board. The government cleared a small plot of land for the machines and a packaging area within one of its procurement centers.

Farmers dump their grain into an underground bin. A mechanical pump sucks the grain from the bin and transfers it to to a grain trolley, from where it’s pushed by machine into the bags.

“Within seven days, we had packed in 15,000 metric tons of grain,” Mr. Kanda said. It takes 20 days for workers to pack one trolley-load of grain by hand into sacks. Mr. Kanda’s machines take about a third of the time.

Of course it costs more, about 900 rupees per ton per annum compared to about 700 rupees per ton per annum for jute bags. But Mr. Kanda claims this is recovered through lower wastage and better nutrient qualtity as no preservatives are required, he says.

Like Mr. Kanda, other businessmen are also looking at innovative packaging solutions in other grain-producing areas, such as in the northern state of Punjab.

With a bumper wheat harvest, Punjab is experimenting with something called hermetic cocoons to solve the problem of rotting food grains. In this method, foodgrain is sealed in a PVC cocoon which is made air tight and sealed after draining out the oxygen. The government has joined hands with a private partner to introduce this technology.

These solutions might not replace grain packed by hand overnight. And they’re no substitute for silos, which many say India’s government needs to quickly develop to stop grain rotting. But they’re a start.